Defining FOCs and the Problems they Pose

Why do shipowners register ships in FOC states?
Shipowners usually register ships in FOC states because they have cheap registration fees and low taxes or no taxes at all. These states also allow shipowners to employ cheap labour, cutting costs by lowering standards of living and working conditions for crewmembers. FOC registries also enable shipowners to employ a non-unionised workforce.

Globalisation has helped to fuel this rush to the bottom. In an increasingly fierce competitive shipping market, each new FOC promotes itself by offering the lowest possible fees and the minimum of regulation. Similarly, shipowners are forced to look for the cheapest and least regulated ways of running their vessels to remain competitive - and FOCs provide the solution.

How does the ITF decide when to declare a registry a flag of convenience?
When the ITF declares a registry an FOC, it looks at the number of foreign-owned vessels that are registered to the state as well as at:

  • the ability and willingness of the flag state to enforce international minimum social standards on its vessels - this includes respect for human and trade union rights
  • the flag state’s social record – focusing, for example, on the extent to which it has ratified and enforced International Labour Organization conventions and recommendations
  • the state’s safety and environmental record – this takes into account factors such as whether or not it has ratified and enforced International Maritime Organization conventions.

What’s wrong with FOC registries?
The ITF believes that there should be a genuine link between the owner of a vessel and the flag the vessel flies, as stipulated in the United Nations Convention on the Law of the Sea. In the case of FOC registries, this "genuine link" does not exist.

Which registries are listed as FOCs?
The following countries have been declared FOCs:

  • Antigua and Barbuda
  • Bahamas
  • Barbados
  • Belize
  • Bermuda
  • Bolivia
  • Burma
  • Cambodia
  • Cayman Islands
  • Comoros
  • Cyprus
  • Equatorial Guinea
  • France (second register)
  • Georgia
  • Germany (second register)
  • Gibraltar
  • Honduras
  • Jamaica
  • Lebanon
  • Liberia
  • Malta
  • Marshall Islands
  • Mauritius
  • Mongolia
  • Netherlands Antilles
  • North Korea
  • Panama
  • Sao Tome and Principe
  • Sri Lanka
  • St Vincent and the Grenadines
  • Tonga
  • Vanuatu

How do FOCs affect seafarers?
Seafarers who are employed on FOC ships are often denied their basic human and trade union rights. This is because FOC registers do not enforce minimum social standards.

The crew’s home countries can do little to protect them because the rules that apply on board are often those of the country of registration. Most FOC seafarers are not members of a trade union, or if they are, the union frequently has no influence over what happens on board.

Seafarers on FOC ships frequently suffer as a result of:

  • very low wages or no pay at all – crew on FOC ships are frequently owed large sums of money without which they cannot even make their own way home
  • poor on-board conditions
  • inadequate food and clean drinking water
  • long periods of work without proper rest
  • unsafe vessels - many FOC vessels are substandard because they fail to adhere to scheduled maintenance programmes, which a national flag state would impose
  • higher casualty rates - poor safety practices lead to frequent accidents
  • being blacklisted if they make a complaint - this means they may not be able to find alternative employment; some seafarers have even been imprisoned on their return home.

Why are FOCs a security risk?
In the raised security environment there are concerns that terrorist organisations can own and operate ships under the FOC system with impunity. Arms smuggling, the ability to conceal large sums of money, trafficking in goods and people, and other illegal activities can also thrive in the unregulated havens that the FOC system provides. This is because, as corporate investigators have found, the FOC system makes it easy for a shipowner to remain anonymous.

What is the ITF doing to challenge FOCs?

  • The ITF has been campaigning for more than half a century against FOCs by:
  • establishing a network of inspectors to investigate suspect ships and win back pay for seafarers
  • negotiating with the owners of FOC vessels to ensure that seafarers are protected by minimum standards, outlined in ITF collective bargaining agreements
  • helping to win seafarers compensation if they have suffered an injury as a result of an accident on board
  • lobbying the International Labour Organization and other international bodies to work towards the elimination of the FOC system and establishment of a regulatory framework for the shipping industry.
  • strengthening affiliated unions to secure solidarity for the campaign.